SmartyPig: Tips and Tricks To Use Like a Bank Account

In a previous post about 4 Stash Your Cash Deals Most People Haven’t Heard Of, I mentioned the new FDIC-insured savings site SmartyPig.com since they have consistently high yields, currently at 2.15% APY on balances up to $50,000 with no minimums or monthly fees. Funds are held at BBVA Compass Bank.

I also mentioned that even though they do have a some restrictions due to their “piggy bank” image, they have added enough flexibility (in response to user feedback, which should be applauded) that you can use it virtually like any other savings account. I got a few questions on what I actually meant by that statement, so here are a few “hacks” that I have used to increase the flexibility of my savings. I prefer to think of it as getting around their gentle nudges to keep saving. 🙂

Ground Rules

When transferring money into SmartyPig, you must do it in the form of Savings Goals. Your goal can be anywhere between $250 and $250,000, and you must transfer in at least $25 from a linked bank account to get it started. You can also schedule a recurring deposit of at least $10 a month towards the goal, but you don’t have to.

You can make as many goals as you like.

You can make additional one time, non-recurring contributions to a goal.

You can end a goal at any time without penalty, but you will have to redeem the entire existing balance all at once. There are no partial redemptions.

You can change your goal amount at any time.

You can transfer funds in between goals instantly. There is a limit of five outgoing transfers per calendar month per goal. Accrued interest cannot be transferred and will remain in the goal where it was earned.

Emergency Fund / Partial Redemptions

Setting up SmartyPig as an emergency fund is straightforward. I set a big goal like $25,000, and then put in a regular contribution. But what if something comes up and I want to make a withdrawal of say $1,000 out of the $5,000 I’ve already set aside? According to the site, I must end the entire goal and cash it out completely. Not so fast. In this case, I would:

Start a new goal, call it Emergency Fund 2.0.

Transfer $4,000 from my original goal into the new 2.0 goal.

Now, I should be left with $1,000 in my original goal, and I can cash it out by clicking on “Stop Goal”. I’ll also be cashing out all the remaining accrued interest.

I am left with a new goal with $4,000 still earning 2.15% APY, and $1,000 is headed to my main checking account to pay for the unexpected expense.

“Boosted” Gift Cards to Multiple Retailers

Another perk of SmartyPig is the ability to redeem your cash goal for a retailer gift card with a “boost”. You can get a 1% bonus at Wal-mart, 3% at Lowes, 4% at Amazon.com (my fave), and 12% at Macy’s. So for a $250 goal, I could cash out for $260 at Amazon. By default, you can only redeem a goal for one retailer. But by using the method above, you can effectively split your goal balances into smaller chunks.

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Regarding the partial withdrawal and stopping goals, remember that to set up a new goal, it will take 2-3 business days to transfer the initial $25 into that new goal. What I would do is make these Emergency Fund 2.0/3.0/4.0 all in the beginning so if the emergency happens, you can close out a goal isntantly instead of waiting 2-3 days to start a new goal, then another 2-3 to close it out and send to your bank.

I use SmartyPig much in the same way that you described and it works for me. The gift card boost is nice, and while 2.15% is not that exciting, it beats many of the emergency fund alternatives. I don’t think that is correct that you can only redeem a goal for one retailer. I recently stopped a goal and redeemed it for gift cards from multiple retailers with no problems.

I finally setup an account after reading from you about it a few times. Is it possible to “push” money in from another account? I don’t seem to have an account number nor do they make their routing number very easy to find.

Your SmartyPig account number is 38 alpha numeric characters and is encrypted for security reasons. For support and tracking purposes, we refer to accounts by account and goal name. You can only transfer funds into your SmartyPig account via ACH by logging into your account.

Thanks for the tip! I am not too happy with my current online savings account for my emergency fund (interest rates keep going down, account minimum required) and wanted to switch everything over to my Smarty Pig account where I have goals for travel expenses & car repairs. However, until I read this article, I didn’t think it would work since I don’t really have a set “goal” for my emergency fund. I now plan on closing my old savings account and taking your advice on setting up my emergency fund with Smarty Pig. Thanks!

I’ve read that once you reach your goal, you can only get the money back in a debit card form or a gift cards. I read the following online from a review of smarty pig “At no point in time can the funds in your SmartyPig Savings Account be transferred to a third party or a bank account outside of SmartyPig. Funds can only be redeemed on a SmartyPig MasterCard® Debit Card, a Best-In-Class Retail Gift Card or cashiers check.” Is this correct? I don’t want to put $12k on a debit card.

If you have the SmartyPig CashBack Debit Card, you can withdraw funds once a month from each of your goals to it without closing the goals, without a charge, and INSTANTLY. I am an AVID SmartyPig fan, and I love the informal-sounding name.

Blaine ‘Capitals for Emphasis’ DeLancey
p.s. And now with the Debit Card, you get 1% Cash Back on ALL purchases.

Thanks for the tip! I didn’t realize they had this limitation to begin with, so I had set up a “sinking fund” for auto repairs. When I looked to transfer some money back (so as to meet my monthly budget) I was disappointed I would have to completely close the account. But with your post and some quick math, I’ve learned how to overcome this limitation and all is well.

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Rates and terms set on third-party websites are subject to change without notice. Per FTC guidelines, MyMoneyBlog.com has financial relationships with the merchants mentioned. MyMoneyBlog.com is compensated if visitors click on any outbound links and generate sales for the said merchant.

The editorial content on this site is not provided by the companies whose products are featured. Any opinions, analyses, reviews or evaluations provided here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the Advertiser.